tv Fareed Zakaria GPS CNN July 31, 2011 10:00am-11:00am PDT
regretted, and he regretted, was the agreement that was made with the democratic leadership that we would cut spending by $3 and increase taxes for $1 for every cut in -- >> and, wolf, good old-fashioned debate many the united states senate. >> a strong debate. this day is only just beginning. there will be potentially lots of drama. let's pause far second. robot 1:good morning... robot 1:...female child. sfx: modem dial-up noise woman: flaws? yeah, um, maybe. anncr: there's an easier way to save. anncr: get online. go to geico.com. get a quote. 15 minutes could save you 15% or more on car insurance.
we're watching the breaking news on the floor of the united states senate right now. we're watching and they're close to a deal. close but not there yet. in the meantime, there are some procedural votes under way on the floor of the united states senate. we want to welcome our viewers here in the united states and around the world. i'm wolf blitzer reporting from washington. gloria borger, our chief political analyst, is here as well. we have our correspondents standing by on capitol hill as well as over at the white house. but gloria, let's set the scene right now. just saw live here on cnn an extraordinary exchange between senator dick durbin, the democrat from illinois, been a majority whip, the number two democrat in the united states senate, and john mccain, a republican senator from arizona. he was the republican presidential candidate back in 2008. and it was a perfect way to set the scene for this debate that's
unfolding, the stakes, the economic stakes for the united states are, indeed, very, very severe right now. but potentially they are at a turning point. >> yeah, they are, because it seemed that all the rancor was wut of the debate between the two of them. and it seems to me that john mccain was talking about governing, and he was talking about how republicans need to govern. and i think that's something that dick durbin agreed with. earlier in the week, you remember, that john mccain called house republicans hobbitts. >> right. these guys are the grown-ups right now, shall we say, in this whole debate. >> right. yes. >> i think a lot of statesman-like positions have been taken by harry reid and mitch mcconnell on that point. you know what ip to do, i want to go back to the senate floor and listen on what's going on right now, because i think we're all going to get a little bit smarter in the process. >> mrs. feinstein.
mr. franken. mrs. gillibrand. >> no. >> mr. graham. >> all right. so what they're doing is a roll call vote on this harry reid proposal to move forward. they need 60 votes in order to break a filibuster. they're not going to get the 60 votes, we're told so, the debate will continue. but they want to keep this harry reid legislation as a framework throughout there in order to -- if, in fact, there's a bigger agreement between the white house, the republicans and the democrats in the house and the senate, they will at least have this electricityive framework to move the process forward and the clock is clearly ticking before this deadline on tuesday. joe johns i think is up on capitol hill. is he standing by live right now? let's bring in joe johns. joe, walk us through this little
theet they're's under way right now. i say theater respectfully. it's very significant because they will need a legislative framework to get whatever ultimate deal they negotiate through the senate then the house. >> absolutely, wolf. and the bottom line here is the reid proposal as it was originally written and introduced is probably going nowhere in the united states senate. mitch mcconnell sent ow a letter. he's the republican leader saying yesterday that he had 43 votes against it. but what they'd like to do is, if you will, take out the old language and cut and paste the new language they're trying to work on in order to be able to send it back over to the united states house of representatives fairly quickly and get this issue, you know, off the table. meanwhile, wolf, i don't know if you know, but we've been sort of talking around and trying to get a feel for how tough it is for mitch mcconnell, senate republican leader, to get his
people together and also get democrats together on the other side in the event there is a final deal. talking to one gop aide, we got sort of the downside and the criticism about this agreement as it comes together and they try to figure out how to handle it. and here's what that gop aide said. "they are obviously fast tracking the gang of six tax hikes" -- this is the group that worked on this issue some time ago, and then this sumer committee ha has been contemplated as part of this final agreement, he says, "is sure to use the gang of six as the basis for negotiations to consider tax hikes. all the triggers we're talking act, these are the enforcement mechanism, will simply am to more intense pressure on both sides to take whatever the super committee comes out with." the most important point he makes is this is going to look like a big win for the
republicans today because of the cuts and the balanced budget inclusion in this contemplated agreement. but a big loss in the fall if the super committee plan actually passes huge cuts, say, to defense. and so this is one of the things we're seeing here. we know that mitch mcconnell is going to be working hard to get support in the united states senate. we also know that in the republican party it does not look like he's going to give 100% support from where he stands right now, wolf. >> no, but the question is will they get the majority, even get 60 votes in order to get anything really important done in the united states senate. as you know, joe, and you've covered capitol hill for many years, you almost always need 60 votes. so right now there are 51 democrats, two debts who caucus with the democrats, and 47 republicans. i think if harry reid and mitch mcconnell are jointly on board with the president of the united
states, i think it's fair to say they will have more than 60 votes in the united states senate. is that right? >> well, you know, it's anybody's guess quite frankly. and you know as i do anytime you try to predict what's going to happen in the united states senate it's a problem. the question is, you know, there are a lot of democrats out there who have been grumbling and concerned earlier this morning about whether the president of the united states in negotiations with republicans minor league give away too much to make them feel uncomfortable as well. so work in progress here, but the most important thing to say is we have some of the top democrats and republicans in the senate saying they are hopeful, they're optimistic, which is very, very different from what we were hearing just a little over 24 hours ago. >> absolutely true. joe, stand by for a moment. dan lothian is over at the white house. gloria borger is here with me in our studio. gloria, i can't believe that if the majority leader and the
minority leader in the senate and the president of the united states are all on board on the same page, if they reached the final agreement, they won't get 60 votes in the united states senate. i assume they'll get a lot more than that. >> i think what you're hearing is grumbling from conservatives about this so-called super committee joe was just talking act because they believe it puts the defense budge net great jeopardy. so they're worried that if you end up with some kind of across-the-board cut, that what's going to get hurt is defense and it's going to jeopardize national security. so i think that mcconnell is going to get some pushback from a lot of his sort of defense hawks. now, we clearly didn't hear that from john mccain on the floor earlier, although we didn't speak specifically to this deal. but i do believe that's going to be a huge concern of theirs. and on the house side, conservative house republicans who wanted a guaranteed passage
of the balanced budget amendment are not getting what they want either. >> stand by for a moment. dan lothian is our white house correspondent. what are they saying over there, dan? the president of the united states, is he getting ready to go into the east room of the white house and deliver a speech to the nation? will he have harry reid and mitch mcconnell and john boehner and nancy pelosi standing up on a stage with him? are we anywhere close to that kind of image? >> reporter: well, look, i think that is the issue that a lot of people not only here in washington but across the country and certainly overseas as well, as we have been talking to our cnn international audience, they would love to be able to see something like that. i tell you what, though, the white house is trying to manage the level of optimism. you're hearing them say there's still no deal yet but there is still work to be done. i can tell you from a democratic source familiar with the talks that the vice president is involved in deep negotiations not only internally at the white house but also with lawmakers on the hill. as you know, wolf, the vice
president has been quietly working behind the scenes, back-channel talks now for quite some time even as there was criticism from up on the hill that the president himself had not been actively engaged, something that the white house has been pushing back on. so that's where it stands at this point. no word yet from the white house in terms of any kind of official meeting taking place here at the white house or anything on the president's schedule in terms of coming out to the microphones but certainly anything is possible at this point. >> we'll watch it with you together. stand by for a moment. i think they're wrapping up the vote on the senate floor. joe johns, this vote, the roll call basically complete -- we don't have joe right now? joe johns not available. but they're just wrapping it up. let me hear what they're saying on the senate floor. >> -- white house. mr. widen. aye. senators voting in the negative.
mr. johnson, south dakota, aye. mr. leahy. aye. senators voting in the negative. >> all right. they're wrapping up this vote right now on the senate floor. they need 60 votes in order to break a filibuster. i suspect they don't have 60 votes even though one or two or three republicans might, gloria, vote with the democrats on this. there are 53 effective democrats, 51 democrats, two independents, lieberman and bernie sanders of have vth. >> here's kind of an interesting little thing to look for in this, as our congressional producer ted barrett points out, at the end of the vote, look for harry reid to change his vote from yay to nay. and this is a procedure that allows him to bring this up again so it can be used as the vehicle for any eventual compromise. so he has to vote against his
own measure in the end. >> yeah. that's just a formula. but they want to keep this legislative framework alive. >> exactly. >> so if in fact the negotiations are resolved and they've got the language they need, they have this vehicle, they've already done the preliminary procedural work to set the stage for it, and then they can have a formal vote on this. if they need 60 votes i suspect they will get it in the senate. the question is what happens in the house of representatives. you have a lot of tea party people who won't like this deal, won't be happy with it. but you will have some republicans who support it, and i suspect the majority of democrats will support it as well. >> i suspect if the president of the united states says we need to do this that the democrats will vote with him, because don't forget, the republicans can make the case, wolf, that they've passed a couple of bills in the house of representatives. right? and they can say we passed a bill to raise the debt limit,
where's your bill. and so, you know, the democrats are not without political liability here on their own. so i presume they would supply the votes. but again, i think john boehner might like to get more than 30 people on his side of the aisle to vote for this. >> he would definitely -- that would be embarrassing. >> very much. >> but in order to avoid disaster, economic disaster, stuff happens. we're just checking the roll call, gloria, right now. the democratic senator from nebraska voted with the republicans. scott brown, the republican senator from massachusetts, voted with the democrats. the democratic senator from west virginia voted with the republicans. there's a little bit of crossover voter going on. but i suspect that this process will continue. they're not going to be able to break this filibuster. joe johns, walk us through what's happening. they're wrapping up the roll call. >> reporter: they're basically, wolf, trying to get the votes they need to sort of keep the
harry reid structure, if you will, in play in the event they'll need it, throw in some language that they're working on in this tentative framework and send it back over to the house of representatives. it appears to be an attempt at expediency if nothing else. this vote was scheduled last night, and it looks like they decided to go this direction. i do not know what the final vote is, but they're certainly wrapping it up. it's always a lot easier when you're sitting inside the chamber and looking from there. >> yeah, in order for this harry reid proposal to pass they've got to break the filibuster, which would be 60 votes. i suspect they're not going to get the 60 votes right now but as you say they could at least continue this as a structure to move the process forward. in terps of rank and file republicans in the senate, joe, are you getting some additional reaction to what mitch mcconnell told gloria borger on "state of the union" at 9:00 a.m. eastern,
about four hours or so ago, that he's very optimisting, he thinks a deal is nearby? >> honestly, wolf, in talking to people, talking to their offices, and getting e-mails back, i've been getting an awful lot of "i need to see what the plan is, i need to see details." i really have not gotten a sense that rank and file is any more plugged in than we are. and as you know, we're just getting the bare outlines from mitch mcconnell and others, people who are in the room are really not going to sit down on tv and give us all the detail, certainly enough for some of those rank and file members to be able to say yea or nay. >> do you know if they'll be doing form nal briefings in the senate and the house and say we've worked out a deal with the white house, here's what it is, we want to explain why we
believe you need to support this? are any of those meetings as far as you can tell scheduled? >> that's precisely the way it's supposed to work. that's the way it has worked many, many times here on capitol hill on some of the bigger bills and some of the smaller bills, too. however, i haven't heard anything about meetings scheduled simply because no one has said we have a deal. and when somebody says those magic words, usually that's the time when they start telling people, well, we need to get in a room and tell everybody what it is. >> and there's going to be some happy people and some not so happy on capitol hill. gloria borger is with us. glor gloria, this is, to put it mildly, messy. >> very messy. when you look at the overall picture that we're starting to put together this morning, you could say, okay, the president gets his deal into 2013, which is what he wanted. the house gets promised --
promises of substantial budget cuts. and mitch mcconnell gets his commission or committee, as he calls it, which he wants to absolutely enforce those budget cuts. but kind of let out of this are where's the base of the democratic party, they're not going to be happy with the possibility of across-the-board cuts that could affect programs like medicare, for example, and where are conservative republicans who don't want to put defense in this mix at all, even if they get a promise of no revenue? so you're right, there's going to be something for everybody to hate in all of this. but in the end that's the only way to get something like this done. >> and what they would all presumably love is if the united states avoids default and the america's aaa credit rating doesn't become aa or single-a for that matter. that would be a significant gain for everyone. >> that's right. but with one of these -- and they'll all get blamed if there's no deal here. but the problem with one of these kinds of deals is they get
formed and then they have to be run by the caucuses, they have to have input into it. so there is no deal until it's all out there together because they have to kind of manage this. so it's interesting that we had mitch mcconnell this morning talking tact outlines of a deal before the democrats had really, really signed onto it. >> what a situation unfolding. we're standing by, getting ready for that final roll call. they are trying to break a filibuster on the floor of the united states senate right now. harry reid's proposal needs 60 votes right now in order to avoid that filibuster. doesn't look like they're going to get the 60 votes. having said that, it will still enable this process to go forward. i think they're still wrapping up but let's listen. >> mr. reid of nevada. aye.
>> mr. schumer. mr. schumer. aye. >> all right. so they're just wrapping up the roll call right now. they're getting ready to move on to the next process. as we await this roll call, i don't think they'll break the filibuster, but they'll have the structure in hand, the negotiations continuing. you heard mitch mcconnell. he told you not only is he speaking with the vice president, former senator joe biden, also speaking with the president, former senator barack obama. they're having a good conversation. he told you, i like these guys.
he was very upbeat, very positive. >> well, they're listening to him, wolf, which is why he likes them. he doesn't like them so much when they're not listening to them. >> he seems to like biden and the president more than he likes harry reid. >> i think mitch mcconnell -- don't forget, joe biden is essentially the chief congressional liaison for this white house. >> president of the senate, by the way. >> exactly, and a former senator in good standing with people on both sides of the aisle. what i've been told by some republican senators is that joe biden, contrary to popular belief, is actually a good listener and that he's easy to deal with and, as one republican senator said to me this week, he said, you know, joe biden knows how to close a deal. and that's what's very important. and he was making a distinction i think between joe biden and barack obama. he said when you talk to joe biden he asks you how you get from a to b and manages to find a way to get you there, which is something that is much appreciated when you're a leader
because then you can take it back to your caucus and say this is what the white house is thinking and what they will do and this is what they won't do. this isn't joe biden's first negotiation. >> no. joe biden's been around far long time. i'm sure he played a critical role. i'm sure the president of the united states has played a critical role. a lot of people, a lot of democrats have been upset that the president did not invoke that clause in the 14th amendment to the constitution and say you know what, and bill clinton, the former president, recommended he do it. he said you know what, i'm the president. my responsibility is to make sure the united states does not go into default so i'm unilaterally raising the debt ceiling without congressional authorization. >> and you saw what michele bachmann said the minute that was raised, that that would turn this country into a dictat dictatorship. you could see all the legal issues and people saying he should be impeached. this was clearly an area the white house legal team looked at it and said the way to go is the
way that has always been, which is go to the congress and get the afrooufl raise the debt limit. it may be annachronistic in thee times, and fst, you have to fix it but now is not the time to fix it. >> the president's former constitutional scholar, professor at the university of chicago law school. i'm sure that weighed in on his mind as well. joe, we're getting ready for the final roll call on the floor of the u.s. senate. they're trying to break this filibuster. doesn't look like they'll get the 60 votes. if you go inside some of the vote, some of these people who have switched over. i think it's fair to say almost all are up for re-election next year. joe johns, are you hearing me okay? >> reporter: i'm sorry. hi, wolf. >> i was making the point that
ben nelson, the democrat from nebraska, voting with the republicans. scott brown, the republican from massachusetts, voting with the democrats. joe mansion, the democrat from west virginia, voting with the republicans. they all face re-election a year from november. >> reporter: absolutely. there was a handful of three or four people originally that we believed the democrats were going to go for who were republicans who were up for re-election and actually might well have voted with democrats. this is the kind of situation where members of congress are looking at their own personal interest, looking at what's coming down the road, and realizing that, you know, this is an issue that has totally broken through with the public, people are concerned about it, and however you vote, you're definitely going to have to go back to your home state and defend how you voted with people in town halls and on the
campaign trail in that election just coming up, wolf. >> so what happens after this what's called a cloture vote, this vote on trying to break a filibuster fails, and what happens next in the senate? do they debate the issues? do they have these colloquies, exchanges, or is it something else and going to recess? >> this is amazing. i have some sense of the official version of what's going on on the floor. just to give you a little idea of sort of the arcane rules of the united states senate, they're voting to invoke cloture on the motion to concur to the house message with the senate amendment, which is the reid bill. if cloture isn't invoked, reid is going to change his vote to no in order to preserve his right to make a motion to reconsider this amendment. and basically, that is how they get to creating the vehicle where you pretty much cut, copy, and paste the new language
should they get to it into, like, the form of the old bill and send it back over the house. it's very kind of complicated. these are traditions that have been worked out here on capitol hill for over years and decades and centuries. >> so the senate is in business session. the house of representatives is quiet. what are they doing right now? >> reporter: we know they're waiting like everybody else to find out whatever final language, if final language arrives. they're going to have to deal with. i've been in contact with folks on the house of representatives side. one of the thins you all have been talking about is this issue of a balance ed budget aem so nr and deer to those tea party-backed republicans.
they felt it was necessary to tell the senate you have to pass a balanced budget amendment to the united states constitution or we're not going go your way on increasing the debt limit. well, the house of representatives apparently does have -- has been able to get some type of language into this conversation between everybody else that would say, yes, if the president of the united states, if the senate and the house actually get to a balanced budget amendment, that will make it easier the second time around for the president to get a debt limit increase. so there's some balanced budget amendment language being discussed as they work on this framework to try to get some deal before august 2nd, wolf. >> joe, let us know as soon as we get that final roll call result on the floor of the united states senate. we'll stay in close touch with you. don't go too far away. gloria borger is here. one of the silver linings is we
see the way the nation passes legislation. we're all learning a lot about the legislative process, which is very, very good. we did invite some of the house republican leaders to join us and explain what's going on. so far they're remaining silent but i subpoena that won't be for long. >> nobody can explain the senate, wolf. >> always a complicated situation. >> joe johns' point -- >> hold on one second, gloria. let's listen to the final result. >> if not on this vote the yeas are 50 and the nays 49. the three-fifths of the senators duly chosen and sworn not having voted in the affirmative of the motion is not agreed to. >> may i enter a motion to reconsider the vote. >> entered. >> may i have order, mr. president. >> i ask unanimous consent
equally divided and controlled between the two leaders or the designees permed to speak up to ten minutes each during that period of time. >> without objection. >> mr. president, the matter now before the senate is still the pending matter we've been working on for several days. it's extremely important that everyone understand we have a message from the house and if we're going to work something out, which we're hopeful that we can do, that we have a piece of legislation we can do that and not require a bunch of closuwtu votes. that's where we are. we'll see if something can be worked out for the information of senators. i've had a number of conversations in the last hour with people downtown, and the arrangement that is being worked on with the republican leader and the administration and others is not there yet. we're hopeful and confident it can be done. as soon as it is done, i'll let my caucus know i've had conversations with republican leader and other senators. senators should be aware that
further roll call votes are possible today. we'll do everything we can to give members adequate notice before additional roll call votes are made. >> if there were to be a vote, i assume we would have significant notice for our members because many members would probably like to leave the capitol if we're not going to be voting. >> i would say to my friend that's the appropriate thing to do. i would not suggest a ball game, though. maybe closer than that. we'll give everyone adequate notice. we'll do everything we can to give members plenty of notice. as i indicated we'll do on this side of the aisle caucus later today, whenever, wherever we'll be able to do that. i would note the absence of quorum. >> clerk will call the roll. >> motion failed. they didn't break the
filibuster, so the process will continue. but there is a structure now. if there is a deal, if there is a deal involving the president, the democratic and republican leadership of the house and senate, and you just heard harry reid, the majority leader, say he's confident, hopeful that they're getting close to a deal. they're working on it right now. the president and vice president are involved. the leadership of the two houses are involved. no deal until everything is wrapped up. we're going to clearly stay on top of all of the breaking news. we're not going to be far away. this is a very important day in the history of the united states. our coverage will continue throughout the day. i'll be back later tonight for a two-hour special 9:00 p.m. eastern. in the, a eak. when we come back, "fareed zakaria: gps" will air in its entirety.
this is "fareed zakaria: gps". first up, a unique perspective on the economy, global competition, the future of jobs and the role of government. dan akerson, the ceo of general motors, the largest consider manufacturer in the world back from bankruptcy with a bang. then the new head of the imf, france's former finance minister christine lagarde, on the fate of america, greece, the euro and more. also the knights templar. why in the world is an 800-year-old religious organization being cited by murderers on at least two continents? finally, what is this green blob attacking china? first here is my take.
i know you heard so much about the debt ceiling that you're probably exhausted. but i think it's important to point out a few facts because this matter has been so clouded by rhetoric. did you know there is only one other country in the world that even has a debt ceiling? that's denmark. it's a strange anomaly because its debt ceiling is deliberately kept very high so it will never need to be raised. why does no one else have a debt ceiling? because when a legislature votes to authorize spending at a certain level but authorizes tax revenues at a lower level, it is assumed the government will have to borrow the difference. the vote to have higher expenditures than tax revenues is in effect a vote to borrow money to cover the difference. in the united states, congress, including republicans, voted for a budget in which expenditures exceeded tax revenues. so the logical consequence of that budget again passed by the
house republicans and by democrats is that the government has to make up the difference by borrowing. to come at it now after the budget has been passed is like getting your visa bill and then calling up the company to say, actually, we don't want to buy all that stuff we bought. that's not how it works. first you pay the bill, then you can change your spending habits. so why do we have a debt ceiling anyway? ironically, it was put in place during world war i so congress didn't have to authorize every new issue of debt. it was assumed it would be a formality to raise it. since 1960 the debt ceiling has been raised 78 times. my basic point is that this is a crisis we have manufactured out of whole cloth. we have created the circumstances in which the world now doubts our credibility, rating agencies are thinking of downgrading our debt, and the dollar's role as the world's
reserve currency could be jeopardized. please understand that none of these things are happening because the united states is running deficits. there was no indication by any measure that the united states was having difficulty borrowing money one month ago. in fact, the world has been lending money to the united states more cheaply than ever before. we face downgrades and uncertainly and investor panic not because of our deficits but because we are behaving like debt beats, refusing to pay our bills, pouting while the bill collector waits at the door. we do have a large deficit and a large debt, and we do need to get it under control. and the fact that the tea party has raised awareness of this issue is admirable. i actually happen to agree with their view that the current set of entitlements, medicare especially, have to be reformed dramatically to get our fiscal house in order. but that is not an excuse to endanger the good standing of the united states.
first you pay the bills and then you figure out how to change your spending habits. the tragedy is that the damage may already have been done. from now on, every time the debt ceiling needs to be raised, the world will wonder will the united states stand by its promises, or will it break them? something that was taken for granted, the credibility of the united states, is now surrounded by uncertainty. global markets have always had confidence in america. that confidence has been shaken, perhaps forever. and for this erosion, we have only ourselves to blame. let's get started. two years and two months ago one of the most storied american companies filed for bankruptcy protection. in its 100-year history, general motors had once made one out of
every two cars sold in the united states. it had once been the most profitable company in the world. but in 2009 general motors lost $4.2 billion in a single quarter, and only one out of five cars in america were made by the company. today, general motors is making billion-dollar profits again, and it is this year going to be the world's top automaker again. we the taxpayers own about a third of it. what does the future look like for general motors and america? dan akerson is chairman and ceo of general motors. welcome. >> thank you. >> when i ask businessmen why they're not hiring more and you're sitting on lots of cash, one of the things they always say is uncertainty. uncertainty probably affects you more than anyone else, because
consumer demand. if you could get back up to 15 million cars, it would make a big difference. does this incredible month or two of wrangling in washington and the sense we can't get our house in order and we're so divided, do you think this hurts in a measurable way? >> well, you're right. nature abhors a vacuum and markets abhor uncertainty. uncertainty undermines consumer confidence. consumer spending in our country accounts for about 65% to 70% of the gdp. so when consumers lose confidence, they hesitate, not as bullish, not spending money. it does have an impact on the economy. but there are all sorts of uncertainties. you name one. the oil spikes earlier in this year. we got off to a pretty good start in 2011. then oil spiked above $100 a barrel. that particularly concerned our industry. then there was the tragic earthquake and tsunami in japan. that threw a lot of uncertainty into our industry.
so there are all sorts of uncertainty. that's what we get paid to do, is to manage through that. it keeps me awake at night. >> the world you're describing is one where a lot of these uncertainties are beyond anyone's ability to fix. you can ameliorate them a little bit. do you think we're living in a kind of age of uncertainty? >> i do. some of it is self-inflicted. if it were a perfect world, i'd like to see the united states not default, technical or otherwise, because i think that throws another level of uncertainty and instability into the system. i've thought long and hard and so has most of our management team and a lot smarter people than we are, about what are the implications? what are the downstream impacts of a default? well, i'm responsible for general motors, and i would hate
to have the job of one of the policymakers in washington these days. but i can focus and impact on what we're doing at general motors. we have about $35 billion to $40 billion of cash in our balance sheet. that's a lot. but i don't know what's going to happen. >> what would you do if there were a default? now, six months from now, a year from now? >> well, as you know, u.s. treasuries are the, quote, unquote, gold standard. if we default, the cost of treasury will go up and all other, whether they be mortgage rates or car loan rates, will go up. that would create an issue or concern for us. at some level we just may have to kind of batten down the hatches and get through a tough storm. that wouldn't be good for general motors and i don't think it would be good for our
customers or for our country. >> the question everyone wants to know is -- and the tea party, as you know, is animated in part by this concern. should the united states government have bailed general motors out? >> yes. simply put, yes. let me explain why. when you look at the helping hand, if you will, the bailout wasn't just for general motors specifically, but basically an industry. general motors was so dominant, especially in the united states, had chrysler and gm gone down, the supply chain would have cratered and it would have unimaginable impacts throughout the economy. it's estimated there were a million jobs saved in the extended automotive industry, biosphere, if you will. are we dlimping on that promise
today? we're profitable, very profitable. we have saved not only that million jobs in the intervening period since the restructuring of general motors and chrysler, we've hired 115,000 auto workers across the nation. so it saved an industry that is profitable today, healthy today. it's creating jobs and it saved jobs. we've paid back roughly $30 billion plus of the $50 billion that was put in the company. as you say, the taxpayers still own a third. >> a lot of people say the government shouldn't be doing this kind of thing. i was at a speech one day and some guy comes up to me -- i said something about how i supported the rescue effort. he said it's government motors. this is not what the government should be doing. how do you respond to that? i say this because i know you, dan, and you were in the navy, ceo of a tech company, you're kind of a republican-leaning guy i would say.
>> that's probably fair. well, there are certainly different points of view around the table. but to the credit of the government, they invested and stood back and said run it like a corporation. they've never been in the board room. they've never involved themselves in any operational decisions. so the progress and the success of the company has been in the context of a competitive company that's owned now -- we had the largest ipo in the history of the world which we're very proud of -- is the government is an owner. they're a minority owner. we're making great progress. and i think a company like general motors is important in ways that are unimaginable to the industry infrastructure of this country, which is something that's not to be dismissed easily. >> do you think this is something that is an inevitable
emergency role the government has to play? >> there have been cyclical instances over the last 20 or 30 years. we had the brady bonds, basically to bail out sovereign debt around the world when commodity prices got ahead and then collapsed, and secretary brady came to the fore. you had the resolution trust crisis during the s&l crisis. both passed, basically saved industries, if you will. i think this was the same analogous situation. at some point in time the government -- in fact, they're out of chrysler now, and over time i believe they'll come out of general motors as well. >> what do you think of the obama administration in terms of the way it structured the bailout, the conversations, discussions around it. you were on the board then, not ceo. >> i came on the board following the bankruptcy at the request of the invitation of the
administration. i think the restructuring was done by, quite frankly, a bunch of private equity folks who are, i would say, expert in turnarounds and restructurings. it was done pretty well and the proof has been in the subsequent two years. like i said, a very successful ipo, payback of the majority of the money fronted by both the canadian and american governments, and the fact that we're creating profits today, good cash flow, we're hiring people, we're designing cars that are some of the best in the world. we're building them and selling them not only in the united states -- and that's important to mention for general motors. we're a very successful competitor in the united states, we also have the leading market share in the bric countries -- brazil, russia, india, and china.
that money comes back to the united states. we're moving on all fronts, a lot of strength in the company, a lot of energy. very proud of the progress we've made. >> we'll come right back with dan akerson, the ceo of general motors. i'm going to ask why he, the ceo of general motors, is actually in favor of a gas tax when we come back. what's the word around the sink? that it removes 3 times more soap scum per swipe, and it came from outer space. it is not from outer space! no, man, it's from outer space. they're aliens on an intergalactic cleanliness mission. they're here to clean up the universe. oh, the kitchen scrubbers are aliens, too? yeah, look at that greasy kitchen mess. everybody's in on the cleanspiracy, man. i can't even trust myself. [ male announcer ] mr. clean magic eraser kitchen and bath scrubbers. the clean is out of this world. [ male announcer ] get ready for the left lane. the volkswagen autobahn for all event is back. right now, get a great deal on new volkswagen models, including the jetta,
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we are back with dan akerson, the ceo of general motors. you caused some alarm or alarm bells to go off when you said something to the effect that the most efficient thing for the government to do if it wants to encourage us to kind of move to a new generation of cars, wean ourselves off imported oil would be to have a gas tax. tell us why you think that's a good idea. >> well, i think what we need more aptly is a pragmatic national energy policy that is market-based, and then we'll start to allocate resources more efficiently.
we want to be part of the solution that helps us become less dependent on foreign oil, foreign imports. and so we've looked at a variety of technologies we're starting to deploy today. deploy today. we have the volt, which was not a step forward, it was a leap forward in the electric fiction of the car. soon we'll be introducing by fuel engines that both burn compressed natural gas and liquid gasoline. we're looking at hydrogen fuel cells which have no carbon emissions, zero. they are very expensive now but we've just in the last two years reduced the price of that technology by $100,000. the car is still too expensive and probably won't be practical
until 2020 plus period. then there's the issue of infrastructu infrastructure. there are a number of different ways to attack a goal to address an ambition as pieration, that should be a pragmatic natural energy policy. there are many variables and options and alternatives. this was one of many. it's not the only one. >> what i notice right now, given the japanese tsunami and what it's done to the people's views of nuclear power, germany shutting down, switzerland shutting down. the reality is the world is more dependent on oil and natural gas than it has been for a while. can we really wean ourselves off petroleum? >> well, long term i do think we can. i think we ought -- in this country and i think it is region and country specific, you have
to look at what natural resources you have. i believe -- we've been called the saudi arabia of natural gas. i've heard t. boone pickens speak about that specifically. and i do think we should utilize our own natural resources more so than foreign resources, if you will, for a lot of reasons that have benefit in the broader economic context. balance of trade, dependence on maybe unreliable suppliers. >> when you look at the american economy, what we see is we're back to the gdp levels we were 'before the crisis but 10 million fewer people working. that's at some level a sign of great productivity but for 10 million people it's a tragedy. how do you get jobs back and get america to be employing people and in large numbers again? >> well, i think you have to look at innovation, great
nations and i believe we're the greatest nation on face of the earth. we need to continue to invest in r and d and we are. you have to look at automation. we're trying to build the first compact car in the united states. no one is trying to do that today. in this new era of productive industrializations between management and union, i think all parties have learned great lessons over the last couple of years. one of things i've been advocating and is starting to get some traction is that we don't want to see our structural cost go up. the union should be on a profit sharing regime. wherein, if management gets a bonus, union members get a bonus, if we do well, we all ought to share in it. innovation is critical.
20 years the cost of manufacturing a car, the cost of labor was roughly 20 to 25%. today it's 10%. there's fewer jobs but they are more interesting. they are more challenging and we can afford to pay cost but we can't see escalating cost as far as the eye can see. we need to see cost reasonably predictable then the variable component is contingent upon the success if the marketplace. >> pleasure to have you. >> thank you. >> we'll be right back. i had a heart problem.
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knights templar. >> or national treasure. >> they took the name, the knights templar. >> these are of course all fictional. what are the facts? it was a christian military order founded in the early 12th century. the numbers were said to be elite warriors who wore a red cross. they made their reputation by winning a series of battles in crusades. ironically the first headquarters with in a mosque in jerusalem because they believed it was built on top of the ruins solomon's temple. the knights main job was said to be protecting christian pilgrims from muslims. to this day it remains one of the most heavily